October 21, 2013

Russia's wheat harvest outlook may decline due to unfavourable weather

After rains restricted planting of winter crops, the Institute for Agricultural Market Studies said that Russia may lose four million tonnes of wheat from its potential harvest.

Winter-crop sowing in the Central Federal District will fall 25% short of the original target, and farmers in the Volgograd and Rostov regions in the south will also plant less grain than planned, Dmitry Rylko, director of the Moscow-based researcher, also known as IKAR, said in a phone interview. The area planted with winter crops by Russian farmers was 20% smaller than last year, Agriculture Ministry data show.

"Plantings in central Russia and along the Volga are significantly below the target, and there are problems in the south as well," Rylko said. "This may mean a potential shortfall of four million tonnes of wheat for next year's crop."

Winter-crop planting in both Russia and neighbouring Ukraine were delayed due to rains and cold weather. Planting of winter grains in Russia may fall four million hectares (9.9 million acres) below the target, Hamburg-based researcher Oil World said on October 15. Wheat is heading for a fifth straight weekly gain in Chicago, the longest winning streak since July 2012.

Russian farmers planted 12.1 million hectares with grains and other winter crops as of October 17, compared with 15.1 million hectares a year earlier, according to the Agriculture Ministry. The government set a target of 16.4 million hectares under all winter crops. The area may drop to 13 million hectares, Agriculture Minister Nikolai Fedorov said on October 7.

Central Russia and Volga are unlikely to add to plantings, while southern Russia may still sow more, said Alexander Korbut, vice president of Russia's Grain Union, a producer and trader group. The total area under winter crops will come to 14 million to 14.5 million hectares, he said.

Russia's Central district accounted for 26% of the country's grain crop last year, according to the Federal Statistics Service. Farmers in the central Federal District will plant 2.8 million hectares with winter crops, compared with 3.74 million hectares planned, Rylko said. Crops in the area may also be weaker because about 10% of the planting was done at a later than optimal time, Rylko said.

Rostov was the second-biggest grain-growing area last year, accounting for 8.7% of the crop. Farmers in Krasnodar, the top grain region, and Stavropol, the third-biggest, can still increase areas under winter wheat compared with last year, Rylko said.